globalisation

Question 1

ProMoto

Mr. Gary is entering his third year as the chief executive officer (CEO) of ProMoto, the national motorcycle company. All these years the company enjoyed remarkable growth and profit by relying only on the strength of demand from domestic customers. The company used to control more than 60 percent of market share in the country. ProMoto used to be the number one motorcycle brand among the local customers. However, due to globalisation, the situation has dramatically changed. The influx of foreign competitors in the last 2 years has significantly reduced the market share of ProMoto to just 30 percent. Poor management and lack of new product offerings in recent years has aggravated the problem. Faced with decline in sales and increasing competition, Mr. Gary is determined to stop the rot. To start the turnaround effort, he has decided to evaluate the internal and external environment of the company. As an expert in business strategies, you have been hired by the company to perform the evaluation process.

Based on the above information, perform a SWOT analysis on ProMoto. (40 marks)

 

Question 2 Using Porters Five Forces Model, analyse the Malaysian food delivery industry based on:

(i) Rivalry among competing firms.  (30 marks)

 

(ii) Potential entries of new competitors.  (30 marks)

KEY TAKEAWAYS BEFORE ATTEMPTING THIS ASSIGNMENT

With the rise of globalisation, businesses are faced with ever-increasing competition, as seen in ProMoto. Mr. Gary, the company’s CEO, has decided to evaluate the internal and external environment of the company to stop the rot and begin a turnaround effort. In order to do this, this essay will discuss the use of a SWOT analysis to evaluate ProMoto’s internal and external environment and will analyze the Malaysian food delivery industry using Porter’s Five Forces Model, focusing on rivalry
The use of a SWOT analysis to evaluate an organization’s internal and external environment is a popular tool in the field of decision support systems (G Houben, K Lenie, K Vanhoof, 1999). In the case of ProMotos, a motorcycle and parts superstore, a SWOT analysis can provide insight into their current competitive position and what strategies they should consider to improve it. A SWOT analysis involves listing an organization’s Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses are internal factors, while opportunities and threats are external factors. All of these factors should be taken into account to form an accurate picture of the company’s current environment and potential for success. For ProMotos, some of their strengths may include their ability to offer a wide selection of motorcycle parts, services, and bikes; their customer service; and their competitive pricing. On the other hand, some of their weaknesses may include their limited online presence, lack of customer loyalty, and limited marketing budget. In terms of opportunities, ProMotos may be able to take advantage of new technology to improve their online presence and marketing, and expand their product selection or services. Furthermore, potential threats to the business could include new competition from online retailers, changes in customer preferences, and changes in the economy that could reduce consumer spending. By analyzing the internal and external environment of ProMotos using a SWOT analysis, the company can develop a strategy to capitalize on their strengths, reduce their weaknesses, take advantage of opportunities, and prepare for threats. Doing so can help ensure that the company’s decisions are based on an accurate assessment of their current environment, and can help them remain competitive in the changing marketplace.
The Malaysian food delivery industry has grown rapidly in recent years due to the increasing demand for convenience and accessibility. To better understand the competitive landscape within the industry, a Porter’s Five Forces Model is useful. According to P Mugo’s (2020) research, the rivalry among competing firms in the Malaysian food delivery industry is high. This is due to the growing number of food delivery companies entering the market, including international companies like Deliveroo, Foodpanda, and GrabFood. These firms are offering competitive prices and incentives to gain market share, resulting in an increasingly competitive market. In addition, the low switching costs for customers has led to greater price competition, as customers can easily switch to a different delivery service if prices become too high. Furthermore, the high degree of differentiation among the various services has resulted in an overall increase in competition. This is because customers have more options to choose from, allowing them to choose the service that best fits their needs. All of these factors have resulted in a highly competitive landscape within the Malaysian food delivery industry.
The Malaysian food delivery industry has grown rapidly in recent years, with the industry estimated to be worth RM1.4 billion in 2018 (Mathooko & Ogutu, 2015). With the industry growing and more people turning to food delivery services, it is important to analyze the industry using Porter’s Five Forces Model. This model is used to assess the potential entries of new competitors into the market and can provide insight into the current competitive environment. According to the model, the bargaining power of suppliers is an important factor that can affect the industry. Suppliers can increase their power if their products are relatively rare and differentiated, or if they are able to provide services that cannot be easily duplicated (Mathooko & Ogutu, 2015). Additionally, the bargaining power of buyers is also significant, as they can quickly switch to other suppliers if they are unhappy with their current delivery service. Furthermore, the threat of substitutes is also important, as customers may switch to other sources if they are dissatisfied with the food delivery service. Finally, the intensity of competitive rivalry is another factor to consider, as the presence of more competitors can decrease the potential profits of those already in the market (Mathooko & Ogutu, 2015). In conclusion, the Malaysian food delivery industry is highly competitive and dynamic, and potential entrants must be aware of the various factors that can affect the industry when considering entering the market.
Overall, the analysis of ProMoto revealed that while the company had prestigious position in the domestic market, it has recently been facing challenges due to globalization and increased competition. Now, with the help of Porters Five Forces Model, it can be concluded that the Malaysian food delivery industry is competitive with a high threat of new entrants and rivalry among existing competitors. These bear implications for both existing firms and new market players, who have to constantly innovate and stay competitive in order to retain their market share. Therefore, in order to address these challenges, ProMoto and other firms in the industry should adopt an effective mix of strategies to ensure the company’s successful growth in the global market.
Work Cited
K Vanhoof.”A knowledge-based SWOT-analysis system as an instrument for strategic planning in small and medium sized enterprises.”https://www.sciencedirect.com/science/article/pii/S016792369900024X
FM Mathooko., M Ogutu.”Porter’s five competitive forces framework and other factors that influence the choice of response strategies adopted by public universities in Kenya.”https://www.emerald.com/insight/content/doi/10.1108/IJEM-12-2013-0187/full/html
“Porter’s five forces influence on competitive advantage in telecommunication industry in Kenya.”https://www.iprjb.org/journals/index.php/EJBSM/article/view
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